Home equity is surging — and that means homeownership may never be the same

Home equity is surging while house-buying options in an increasingly competitive real estate market keep some owners in their current home longer, and more likely to tap that equity. It’s all leading to some big shifts in the way Americans think about home equity and homeownership.

The number of home equity lines of credit jumped 14% compared to a year ago in the first quarter, while the dollar volume of HELOCs was up 13% over that same period, according to a report from real estate data provider Attom Data released Thursday.

Home equity cruised past its pre-crisis peak a few years ago, and the Federal Reserve said earlier in June that it hit $15 trillion in the first quarter. That gain has been boosted by rising home prices, as well as a tight housing market: when it’s hard to trade up (or down) to another property, Americans stay put longer, allowing them to pay down more and more of their mortgages.

Those two dynamics are also fueling a rise in households tapping their equity: there’s more available, and there’s more reason to age in place, or make other upgrades to existing homes.

But HELOCs and home-equity loans aren’t the only way of leveraging that increased value. Like any loan, they require the borrower to have strong credit.

Two trends when it comes to home equity — sitting on so much increased value you’re incentivized to put it to use, and leveraging expected equity for help on an out-of-reach down payment

MarketWatch profiled another method earlier this month, in which a company offers immediate cash to homeowners in exchange for an equity stake in the home.

MarketWatch was also one of the first publications to cover the use of similar approaches for down payment assistance. That trend has taken off enough that Attom has started tracking “co-buying” in its regular reports. Its most recent data shows that co-buying is trending up as home prices surge. (Co-buying can refer to formal business deals like those made by companies like Unison, or to arrangements between relatives or friends.)

Last year, Attom found co-buying in 33% of San Francisco sales. Now it’s up to 38%. It accounted for 26% of sales in Seattle last year, and had climbed to 28% this year.

The two trends — sitting on so much home equity you’re incentivized to put it to use, and having to take on a partner in order to get a foot in the door — are what you might call flip sides of the new housing market coin.

As noted venture capitalist Alex Rampell of Andreessen Horowitz told MarketWatch, one of the big challenges of the housing market has always been that it “is very binary — you either own or you rent.”

Making equity more flexible and liquid is one way to get past that either-or dynamic, and hopefully enable the market to serve more Americans better.